Before you venture into
forex trading, it is vital to familiarize yourself with the basic forex terms. The base currency is the currency
you are selling while the quote currency is the currency you are buying. For example, in a currency quote or list of
EUR/USD, the EUR is the base currency while the Dollar is the quoted currency. Then there is the bid price which represents the optimum price to sell your currency. It is also the price at which the forex trade brokers are willing to buy the base currency for the quote currency. Ask price on the other hand is the optimum price at which you are willing to purchase currency. Or, it is the best price at which the broker is willing to sell the base currency for the quote currency.

The base currency is taken to be 1 unit in the currency quotes. An investor can make money in forex
trade by either the quoted currency increasing in value or the base currency
decreasing in value. For example, if the Euro/USD quote increases from $ 1.1451
to 1. 1461 on a $100,000 lot, the investor will make money amounting to $ 100,000
(1.1460-1.1450).

After these basics, the
trader will open an online forex brokerage account. There are many brokerage
firms in the industry to choose from. Before going live, it is advisable to use
a practice account. Nearly all forex accounts have a practice or demo account. The
demo account will help you to know the different aspects of trading forex. Next,
since forex trading is betting on currencies, study the market first. Analyze
for instance the political environment of the currencies. Also, start
small.